8-K

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 OR 15(d) of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported)			November 16, 2006
CINCINNATI FINANCIAL CORPORATION
(Exact name of registrant as specified in its charter)
Ohio		0-4604		31-0746871
(State or other jurisdiction of incorporation)		(Commission File Number)		(I.R.S. Employer Identification No.)
6200 S. Gilmore Road, Fairfield, Ohio				45014-5141
(Address of principal executive offices)				(Zip Code)
Registrant’s telephone number, including area code			(513) 870-2000
(Former name or former address, if changed since last report.)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
¨	Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
¨	Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
¨	Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
¨	Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13a-4(c))

Item 7.01. Regulation FD Disclosure

Cincinnati Financial Corporation’s senior officers will be meeting with investors and analysts and presenting at an industry conference on November 16. These discussions will focus on the company’s strategy and outlook.

In advance of those meetings and based on available information regarding interim financial results, we are reaffirming our 2006 full-year guidance, as previously disclosed on November 1, 2006, as follows:

·

2006 property casualty written premiums expected to be up more than 2 percent, with modest growth in commercial lines written premiums offsetting anticipated decline in personal lines written premiums.

·

2006 GAAP combined ratio expected to be 94 percent to 95 percent, assuming full-year catastrophe losses contribute more than 5.0 percentage points. As previously announced, catastrophe losses from a storm in early October are expected to be at least $35 million.

·

2006 pretax investment income growth expected to be in the range of 8.0 percent to 8.5 percent range.

This is our “Safe Harbor” statement under the Private Securities Litigation Reform Act of 1995. Our business is subject to certain risks and uncertainties that may cause actual results to differ materially from those suggested by the forward-looking statements in this report. Some of those risks and uncertainties are discussed in our 2005 Annual Report on Form 10-K, Item 1A, Risk Factors, Page 21. Although we often review or update our forward-looking statements when events warrant, we caution our readers that we undertake no obligation to do so.

Factors that could cause or contribute to such differences include, but are not limited to:

·

Unusually high levels of catastrophe losses due to risk concentrations, changes in weather patterns, environmental events, terrorism incidents or other causes

·

Increased frequency and/or severity of claims

·

Inaccurate estimates or assumptions used for critical accounting estimates

·

Events or actions, including unauthorized intentional circumvention of controls, that reduce the company’s future ability to maintain effective internal control over financial reporting under the Sarbanes-Oxley Act of 2002

·

Events or conditions that could weaken or harm the company’s relationships with its independent agencies and hamper opportunities to add new agencies, resulting in limitations on the company’s opportunities for growth, such as:

○

Downgrade of the company’s financial strength ratings,

○

Concerns that doing business with the company is too difficult  

○

Perceptions that the company’s level of service, particularly claims service, is no longer a distinguishing characteristic in the marketplace or

○

Regulations or laws that change industry or company practices for our agents.

·

Delays or inadequacies in the development, implementation, performance and benefits of technology projects and enhancements

·

Ability to obtain adequate reinsurance on acceptable terms, amount of reinsurance purchased, financial strength of reinsurers and the potential for non-payment or delay in payment by reinsurers

·

Increased competition that could result in a significant reduction in the company’s premium growth rate

·

Underwriting and pricing methods adopted by competitors that could allow them to identify and flexibly price risks, which could decrease our competitive advantages

·

Actions of insurance departments, state attorneys general or other regulatory agencies that:

○

Place the insurance industry under greater regulatory scrutiny or result in new statutes, rules and regulations

○

Increase our expenses

○

Add assessments for guaranty funds, other insurance related assessments or mandatory reinsurance arrangements; or that impair our ability to recover such assessments through future surcharges or other rate changes

○

Limit our ability to set fair, adequate and reasonable rates

○

Place us at a disadvantage in the marketplace or

○

Restrict our ability to execute our business model, including the way we compensate agents

·

Sustained decline in overall stock market values negatively affecting the company’s equity portfolio and book value; in particular a sustained decline in the market value of Fifth Third Bancorp (NASDAQ:FITB) shares, a significant equity holding

·

Recession or other economic conditions or regulatory, accounting or tax changes resulting in lower demand for insurance products

·

Events that lead to a significant decline in the value of a particular security and impairment of the asset

·

Prolonged medium- and long-term low interest rate environment or other factors that limit the company’s ability to generate growth in investment income

·

Adverse outcomes from litigation or administrative proceedings

·

Investment activities or market value fluctuations that trigger restrictions applicable to the parent company under the Investment Company Act of 1940

·

Events, such as an avian flu epidemic, natural catastrophe or construction delays, that could hamper our ability to assemble our workforce at our headquarters location

Further, the company’s insurance businesses are subject to the effects of changing social, economic and regulatory environments. Public and regulatory initiatives have included efforts to adversely influence and restrict premium rates, restrict the ability to cancel policies, impose underwriting standards and expand overall regulation. The company also is subject to public and regulatory initiatives that can affect the market value for its common stock, such as recent measures affecting corporate financial reporting and governance. The ultimate changes and eventual effects, if any, of these initiatives are uncertain.

This report should not be deemed an admission as to the materiality of any information contained herein or in attached exhibits. The information furnished in this report shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, or otherwise subject to the liabilities of that Section, nor shall such information be deemed incorporated by reference in any filing under the Securities Act of 1933, as amended.

Item 9.01 Financial Statements and Exhibits.

(c) Exhibits

Exhibit 99.1 – Credit Suisse Insurance Conference Presentation, November 16, 2006

Signature

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

CINCINNATI FINANCIAL CORPORATION\

Date November 16, 2006

/S/ Kenneth W. Stecher

Kenneth W. Stecher

Chief Financial Officer, Executive Vice President, Secretary and Treasurer

(Principal Accounting Officer)

EX-99

Cincinnati Financial

C    O    R    P    O    R    A    T    I    O    N

Credit Suisse Insurance Conference
November 16, 2006

Cincinnati Financial

C    O    R    P    O    R    A    T    I    O    N

Jack Schiff, Jr., CPCU, Chairman, Chief Executive Officer
J.F. Scherer, Senior Vice President - Sales & Marketing
Marty Hollenbeck, CFA, Vice President - Investments
Heather Wietzel, Vice President - Investor Relations

Nasdaq: CINF

§

Today’s presentation contains forward-looking statements that involve risks and uncertainties. Please refer to our various filings with the Securities and Exchange Commission for factors that could cause results to materially differ from those discussed.

§

The forward-looking information in this presentation has been publicly disclosed, most recently on November 16, 2006, and should be considered to be effective only as of that date. Its inclusion in this document is not intended to be an update or reaffirmation of the forward-looking information as of any later date.

§

Reconciliations of non-GAAP and non-statutory data are available at www.cinfin.com.

Regional Property Casualty Insurer

§	Market capitalization of	[Map attached in PDF format]
	$8.1 billion
§	22nd largest publicly traded
	U.S. property casualty
	insurer based on revenues
§	Serving select group of
	agencies in 32 states
§	Market for 75% of agency’s
	typical risks
§	Well capitalized and highly
	rated with A.M. Best
	rating of A++

Confidence in the Long-term

[Graph attached in PDF format]

* See the Financials & Analysis tab of the Investors page of ww.cinfin.com for non-GAAP and non-statutory reconciliation information

Outlook: 2006 and Beyond

§

2006 outlook

-

Written premiums up at least 2%

-

GAAP combined ratio of 94% to 95%, catastrophe losses above 5.0%

-

Investment income growth in 8.0% to 8.5% range

-

Option expensing

§

And beyond

-

Sustain steady growth

-

Maintain industry-leading profitability

-

Accelerate investment income growth

-

Bring results to bottom line

-

Equity portfolio performance ahead of S&P 500 - resumption of book value growth

Distinguishing Cincinnati

§

Cultivate relationships with independent agents

-

Making decisions at the local level

§

Invest for long-term total-return

-

Covering insurance liabilities by purchasing fixed-maturity securities

-

Using available cash to purchase equity securities

§

Achieve claims excellence

-

Responding to reported claims

-

Reserving for not-yet paid or reported claims

Achieve Claims Excellence

Claims Philosophy

§

Respond to reported claims

-

750 claims representatives

-

Based in local communities

-

Serving agencies, policyholders and claimants

§

Headquarter claims supervisors averaging more than 25 years of experience

Total Statutory Reserve Balance
Objective: modestly redundant reserves

Property casualty group

[Graph attached in PDF format]

Cultivate Relationships with
Independent Agents

Proven Agency-centered Business Strategy

§

Regional carrier

-

Wide range of property casualty coverages

-

Market for about 75% of agency’s typical risks

§

1,150 field associates assigned to agencies

§

Local agents place value on claims service, market stability, financial strength, access to executives

-

Cincinnati is #1 or #2 carrier in approximately 74% of reporting agency locations served for more than five years

Market for 75% of Agency’s Typical Risks

Consolidated $3.164 Billion Property Casualty $3.058 Billion

[Charts attached in PDF format]

Percent of 2005 Consolidated Net Earned Premiums

*Includes Machinery & Equipment

Opportunities to Continue Strong Growth

§	Room to grow in	Property casualty insurance Net written premium growth [Chart attached in PDF format]
	marketplace
§	Continue to subdivide
	territories to improve
	service
§	Increase penetration
	of each agency’s
	business
§	Selectively appoint
	new agencies
* See the Financials & Analysis tab of the Investors page of ww.cinfin.com for non-GAAP and non-statutory reconciliation information

Balancing Growth with Profitability

§	Targeting FY 2006	Adjusted statutory combined ratio [Chart attached in PDF format]
	GAAP combined ratio
	of 94% - 95%
	- Catastrophe losses
	could be above 5.0%
§	Leverage local
	knowledge/underwriting
§	Maintain low cost
	structure
* See the Financials & Analysis tab of the Investors page of ww.cinfin.com for non-GAAP and non-statutory reconciliation information

Invest for Long-term
Total Return

Investment Philosophy

§

Cover current liabilities with fixed-income investments

§

Allocate new cash flow to equity securities, considering:

-

Insurance department regulations

-

Rating agency commentary

-

Common stock to statutory surplus ratio

-

Parent-company investment assets to total assets ratio

§

Equity investment offers potential for current income and capital appreciation

Portfolio Goals

Income		Growth
§	Achieved with interest and	§	Long-term investment horizon
	dividends	§	Increases surplus
§	Bond quality rising;	§	Enhances book value and
	municipals, agency paper		financial strength
§	Large, long-term positions in	§	Primarily achieved with
	proven, dividend-paying		common and convertible
	companies		securities
§	Reinvest coupon payments
§	Compounding

Investment Portfolio

Total-return focused

As of September 30, 2006, in billions

[Chart attached in PDF format]

Compounding Cash Flows

Over the long term

§	Pretax investment income	Investment income [Chart attached in PDF format]
	provides primary source of
	profit and cash flow
	- Dividend increases from
	38 equity holdings in the
	last 12 months =
	$15 million in annualized
	investment income
§	Surplus contributes to
	financial strength
§	Drives book value growth

Maintain Financial Strength

§

Property casualty surplus ratio of 0.7-to-1 vs. industry average 1.0-to-1 (12/31/05)

§

Only 1.7% of property casualty groups rated A++ by A.M. Best

	Senior Debentures	Property Casualty	Life
A.M. Best	aa-	A++	A+
Fitch	A+	AA	AA
Moody’s	A2	Aa3	--
S&P	A	AA-	AA-

Cincinnati Financial

C    O    R    P    O    R    A    T    I    O    N

Jack Schiff, Jr., CPCU, Chairman, Chief Executive Officer
J.F. Scherer, Senior Vice President - Sales & Marketing
Marty Hollenbeck, CFA, Vice President - Investments
Heather Wietzel, Vice President - Investor Relations

Enhancing Return to Shareholders

§	Focus on total return -	Total Return Analysis December 31 totals [Chart attached in PDF format]
	appreciation plus dividends
	plus share repurchase
	- 1.85 million shares
	repurchased in first-quarter
	2006
§	11.8% 10-year compound
	growth of paid dividends
	(1995-2005)
§	9.8% increase in 2006
	indicated annual cash
	dividend rate
	- 46th consecutive annual
	cash dividend increase

Cincinnati Financial

C    O    R    P    O    R    A    T    I    O    N

Jack Schiff, Jr., CPCU, Chairman, Chief Executive Officer
J.F. Scherer, Senior Vice President - Sales & Marketing
Marty Hollenbeck, CFA, Vice President - Investments
Heather Wietzel, Vice President - Investor Relations